Summary of a Recent
Judicial Development in
Production Contracts

Plaintiff Fails to Offer Evidence to Support PSA Claim

John Pesek
National AgLaw Center Research Associate

Summary of Decision

In Wheeler v. Cagle Foods JV, LLC, 148 Fed. App'x 760, 2005 WL 1349857 (11th Cir. 2005), the plaintiff failed to prove six claims against the defendant for violations of the Packers and Stockyard Act (PSA). The Eleventh Circuit Court of Appeals affirmed the order of the district court, which held that the plaintiff did not offer sufficient evidence to prove a violation of the PSA.

Background

The court stated that the facts of the plaintiff's action were identical to the facts of Glass v. Cagle's Inc., 143 Fed. App'x 300, 2005 WL 1349857 (11th Cir. 2005), and therefore did not give a summation of background information. See id. at *1. In Glass, the plaintiff constructed poultry houses and was a grower for Cagle's. Brief of Petitioner, Glass v. Cagle's, Inc., No. 04-15431-FF, 2005 WL 3148148, at *8-9. He expanded his operation, but then began receiving fewer birds in his shipments from Cagle's. Id. at *9-10. The plaintiff alleged that Cagle's made misrepresentations regarding the number of birds he would receive. Id. at *10-11. He also objected to the way that the tournament compensation system was run and claimed that Cagle's failed to weigh his birds in a "timely fashion," and he argued that as a result, his compensation was reduced. Id. at *15-16. He then became active in the United Poultry Growers Association, and he claimed that Cagle's retaliated against him for his actions related to his involvement and his refusal to sign a new contract which contained an arbitration provision. Id. at *24-25. The alleged retaliation consisted of being supplied with smaller, inferior birds, which ultimately reduced his income, along with other alleged discriminatory actions. See id.

In Wheeler's case, Cagle's moved for summary judgment on all claims, and the district court entered judgment in favor of the defendant, and the plaintiff appealed. Wheeler at *1.

Arguments

The plaintiff alleged six claims against the defendant: "(1) violation of the Packers and Stockyard Act (PSA); (2) fraud; (3) violation of Georgia [Racketeer Influenced and Corrupt Organizations Act (RICO)]; (4) fraud in the inducement and promissory estoppel; (5) violations of the Agricultural Fair Practices Act (AFPA); and (6) breach of contract." Id.

Analysis and Holdings

The Eleventh Circuit Court of Appeals held that the plaintiff's PSA claim failed because he offered no admissible evidence to prove that the defendant provided him with inferior birds. Id. The court agreed with the district court that the defendant provided unrefuted evidence that the defendant had no way to target specific farms for the delivery of inferior birds. Id. The plaintiff also failed to provide evidence that the defendant charged him for feed that he did not actually receive because the plaintiff did not constantly check his feed inventory. Id. The court found that the arbitration portion of the contract did not violate the PSA because the same contract was offered to all growers. Id. The court then held that the plaintiff's Georgia RICO claims failed for the same reason that the PSA claim failed-a lack of sufficient evidence. Id. at *2. The plaintiff's fraud in the inducement claim failed because he did not establish the elements of that claim; specifically, the plaintiff independently researched projections given to him by the defendant and found them to be reasonable and accurate. Id. The court held that the promissory estoppel argument failed because the parties had a written contract covering the disputed promises. Id. The AFPA claimed failed because the plaintiff failed to prove that the defendant prevented him from participating in a grower or poultry association or discriminated against him for such participation. Id. The court, in its final holding, explained that the contract claim also failed because the defendant met all its contractual obligations and that it raised the payment amount per pound of bird weight, resulting in the plaintiff receiving near the projected amount under the contract. Id.

The case was decided on June 8, 2005.